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USA Rare Earth has agreed to acquire Brazil-based Serra Verde Group in a deal valued at approximately $2.8 billion, creating an integrated rare earth platform spanning mining, processing, separation, metallization and magnet manufacturing as demand for critical minerals continues to grow.
USA Rare Earth has announced a definitive agreement to acquire 100% of Serra Verde Group, owner of the Pela Ema rare earth mine and processing plant in Goiás, Brazil, in a transaction valued at approximately $2.8 billion.
The acquisition combines USA Rare Earth’s downstream processing and magnet-making capabilities with Serra Verde’s producing rare earth operation, which the companies describe as the only scaled producer outside Asia capable of supplying all four magnetic rare earth elements.
The transaction is expected to close in the third quarter of 2026, subject to regulatory approvals and customary closing conditions.
Rare Earth Supply Chain Expansion Outside Asia
Under the terms of the agreement, consideration includes $300 million in cash and 126.849 million newly issued shares of USA Rare Earth common stock.
The combined business aims to establish an integrated rare earth supply chain covering mining, processing, separation, metallization and magnet production.
Serra Verde’s Pela Ema operation contains all four magnetic rare earths required for permanent NdFeB magnets, including Dysprosium, Terbium and Yttrium. The mine entered production in 2024 following more than $1.1 billion in capital investment.
USA Rare Earth said the acquisition strengthens its position in critical minerals and supports long-term rare earth supply security outside Asia.
Barbara Humpton, Chief Executive Officer of USA Rare Earth, said: “The acquisition of Serra Verde represents a transformational step in delivering on our ambition to build a global champion and the partner of choice in rare earth elements, oxides, metals and magnets. Serra Verde’s Pela Ema mine is a one-of-a-kind asset and the only producer outside Asia capable of supplying all four magnetic rare earths at scale, together with other vital REEs, such as Yttrium. Serra Verde’s global importance is evidenced by its 15-year offtake agreement with a special purpose vehicle capitalized by various U.S. Government entities, as well as private capital sources, for 100% of its Phase 1 Nd, Pr, Dy and Tb production.
By combining Serra Verde’s world-class operations and team with our processing, separation, metallization and magnet-making capabilities, we are advancing our goal of creating a fully integrated platform that will serve as a cornerstone of global rare earth supply security for decades to come.”
Critical Minerals Strategy and Heavy Rare Earth Production
Serra Verde production is expected to represent more than 50% of total non-China heavy rare earth supply by 2027.
The combined company plans to expand capabilities across the full rare earth value chain, including upstream mining and downstream magnet manufacturing.
Expansion opportunities include a potential Phase 2 increase in production at Pela Ema and the continued development of USA Rare Earth’s Round Top project.
Rare Earth Production Capacity and EBITDA Targets
Serra Verde is projected to produce approximately 6,400 metric tons of total rare earth oxide (TREO) annually at Phase 1 nameplate capacity by the end of 2027.
Serra Verde is expected to generate annualized run-rate EBITDA of between $550 million and $650 million by the end of 2027, based on 100% separated oxide sales.
The combined company is expected to generate approximately $1.8 billion of annualized EBITDA by the end of 2030 with around 80% cash flow conversion.
US Government Support and Rare Earth Offtake Agreements
The deal includes significant backing from U.S. government-related financing and strategic agreements.
Serra Verde has secured a $565 million financing package from the U.S. International Development Finance Corporation to support optimisation and expansion initiatives through to positive cash flow.
The company has also signed a 15-year, 100% offtake agreement with a special purpose vehicle capitalised by various U.S. government entities and private capital sources. The agreement covers all four magnetic rare earths required for permanent magnet production and includes minimum price floors for Neodymium, Praseodymium, Dysprosium and Terbium.
The combined company is expected to have approximately $3.2 billion in pro-forma liquidity, including access to milestone-based financing from U.S. government loan facilities.
Mining Leadership and Executive Appointments
The acquisition will also expand USA Rare Earth’s leadership team and technical expertise.
Sir Mick Davis, Chairman of Serra Verde and former CEO of Xstrata plc, is expected to join the USA Rare Earth board, while Serra Verde CEO Thras Moraitis will become President and a Board Director of USA Rare Earth.
Barbara Humpton will continue as CEO and Board Director, while Michael Blitzer remains Chairman of the Board.
Executive Commentary on Rare Earth Supply Security
Thras Moraitis, Chief Executive Officer of Serra Verde Group, said: “Rare earths represent a strategic nexus where national and energy security, and technological supremacy, converge. The Western rare earth sector stands at a critical inflection point, as governments and strategic industries urgently seek reliable sources of critical rare earths—particularly scarce heavy rare earths.
Over Serra Verde’s 15-year journey, our team has remained steadfastly focused on building a scaled, responsible source of these vital materials that power forward-facing technologies. Joining forces with USA Rare Earth accelerates the realization of our shared vision: establishing a secure, diversified global rare earth supply chain.
We are excited to contribute our operational expertise, government partnerships, and significant growth potential to this combined platform. Leveraging our proven track record and knowhow in upstream development, we will contribute to the development of USA Rare Earth’s Round Top project.
Together, we believe the combined company will deliver a fully integrated rare earth solution at scale, accelerate growth, and create enhanced value for all stakeholders—including shareholders, customers, employees, local communities, and governments spanning Brazil, the United States, and our Allies.”
This article was produced by the editorial team at Mining Outlook and published as part of the Outlook Publishing global network of B2B industry magazines.
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